After another rate increase last week, the Federal Reserve chair signaled a potential pause in hikes, causing a slight dip in mortgage rates. Economists are expecting rates to gradually decline throughout the remainder of 2023 and into 2024, and long-delayed homebuyers are rejoicing, Realtor.com reports.
The monthly Fannie Mae Home Purchase Sentiment Index rose in April to its highest level since May 2022, with 22% of consumers saying they expect rates to go down, compared with just 12% last month. In addition, the share of respondents who said now is a good time to buy a home rose to 23% in April from 20% the previous month.
People believe mortgage rates will fall over the next year, which “could be due to a combination of factors,” [Doug] Duncan said, “including an awareness of decelerating inflation, market suggestions that monetary conditions will ease in the not-too-distant future, and, of course, actual mortgage rate declines during the month.”
But would-be buyers are still frustrated by how expensive it is to buy a home. Many respondents said they expect home prices to go up in the next 12 months. The share of those who believe in rising home prices was 37% in April, up from 32% the previous month.
Advertisement
Related Stories
Government + Policy
Can Limiting Hedge Funds From Buying Homes Lower Housing Prices?
Since large institutions make up just 13% of all investor homebuyers, their impact on rising home prices may not be as significant as some believe
Housing Policy + Finance
Even With Inflation Running Hot and Elevated Mortgage Rates, Buyer Demand Rises
Mortgage rates will likely stay high for the next few months, but that doesn't seem to be deterring homebuyers
Housing Policy + Finance
The Garden State Takes a New Approach to Expanding Affordable Housing
Recent legislation in New Jersey could provide inspiration for eliminating affordable housing hurdles in other places with strong housing markets